Tokenomics Rework Prelude (RPIP-62)

This proposal aims to improve RPL tokenomics in the short term to unlock protocol growth.

Outcome If Either Variant Passes

• The RPL requirement for new minipools will be removed
• The commission for new minipool contracts will be lowered to 5%
• Minipool commission structure will change (dynamic commission)
  • 8 ETH minipools opted into the smoothing pool will receive bonus commission as part of their reward claim
  • Nodes without an associated RPL stake will be entitled to 10% total commission (e.g. 5% contract + 5% bonus)
  • Total commission increases linearly with RPL stake up to a maximum of 14% for RPL positions worth at least 10% of borrowed ETH
  • Contract commission is fixed and acts as a lower bound for total commission. Therefore, existing minipools with higher contract commission will not be affected by this change
  • Bonus commission will be removed (leaving only the 5% contract commission) with the 5th reward snapshot after Saturn 1
• The parameter changes will be implemented using pDAO bootstrap mode
  • The guardian will be instructed to invoke the function at the start of the reward period immediately following the vote
  • Dynamic commission may not be rolled out at the same time as it requires the implementation of Reward Tree Spec v10

Outcome If Variant A Passes

• RPL reward structure will remain the same
  • Nodes with an RPL stake above 10% of borrowed ETH qualify for RPL issuance rewards
  • Nodes with an RPL stake of 10-15% of borrowed ETH receive the maximum APY
  • Marginal RPL staking APY decreases beyond 15%

Outcome If Variant B Passes

• RPL reward structure will change
  • Nodes with an RPL stake of any size qualify for RPL issuance rewards
  • Nodes with an RPL stake of 0-15% of borrowed ETH receive the maximum APY
  • Marginal RPL staking APY decreases beyond 15%

Rationale

With the DAO having voted for the Saturn upgrade, the fundamental value of RPL will primarily be based on future megapool TVL. Short term increases in TVL are beneficial for the protocol as long as they can be expected to convert to megapools. On the other hand, as competition emerges and an equivalent or higher yield is accessible without the need to acquire a protocol token, short-term RPL utility is unlikely to continue to significantly support fundamental value. Therefore, node operation is made more attractive by allowing minipool creation without RPL. Contract commission for these new ETH-only minipools is kept less attractive than megapool validators under Saturn 1 to encourage migration once dynamic commission is disabled. In the interest of acting fast, this proposal minimizes smart contract changes. The suggested parameter changes can be enacted immediately after the vote passes and RPIP-63 is implemented.

Context

• RPIP-62
• RPIP-62 Discussion Thread
• RPIP-62 Sentiment Poll